Roberto CrÃspulo Goizueta Cantera was Chairman, Director, and Chief Executive Officer of The Coca-Cola Company from August 1980 until his death in October 1997. In the 1980s he had a simple yet powerful insight that he shared with his senior executives. He asked a very simple question: What was the average per capita daily consumption of fluids by the worlds 4.4 billion people? The answer was: 64 ounces. He then proceeded to ask the next question which was: What is the daily per capita consumption of Coca Cola? The Answer: Less than 2 ounces.
Finally, he asked the following question: What’s our market share of the stomach? This question made the entire team realise that of all the fluids everyone drinks in a day, Coca-Colas share was minuscule. Coca-Cola had invested a lot in the idea of PepsiCo as their main enemy. Goizueta with a few simple questions, redefined the entire market of Coca-Cola. He led his team to believe that the competition is not just with PepsiCo but it was with coffee, milk and tea. It was with water.
Growth is a hot topic today. Business leaders are now realising that apart from operational excellence it’s extremely important to focus on growth as well. To create growth opportunities, you must first start to think clearly about growth.
The following 5 points will enable you to get started:
- Abandon the idea of a mature business: You got to come to terms with the fact that there is no such thing such as a matured business. Whatever business you are in, no matter how matured the industry is, you can grow once you learn how to look beyond the factors that define your market space and industry ( refer the Coca-Cola example above)
- Growth for the sake of growth: Growth for the sake of growth can be disastrous. Good growth is slow (think compounding), sustainable, profitable and capital efficient. Don’t confuse growth with some momentary spikes in sales orders leading to increased sales volumes. It’s about consistency over intensity.
- It starts with the leadership at the top: It starts with a idea or a point of view that the leadership puts forward, which then gains momentum when everybody buys into what the leaders in the company are teaching and coaching.
- Balanced Growth is key: Balanced and sustainable growth i.e. growth for the long haul requires meticulous attention to the basics: cost structure, quality, product development cycle time, asset utilisation, quality, supply chain innovation, cash flows, sales, marketing, customer service and all other aspects of operational excellence. An unwavering focus on these aspects generates the resources for growth.
- Growing is less risky: From a personal stand point yes its risky because it takes courage to put an idea out there and stick with it. But if your strategy is based upon long term sustainable growth that is tightly coupled with your customers needs and also with the basics of operational excellence as outlined in point 4 above then growing your business becomes far less risky than rearranging the furniture when your competition is growing and you are not.
So start with a clear point of view about growth and make it a part of your company’s DNA. Here’s to growth.
Credit: Every Business is a Growth Business: Ram Charan and Noel Tichy.